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Uranium Week: Sanctions Getting Closer

Weekly Reports | Feb 21 2023

Developments suggest sanctions on Russian uranium may not be too far away, while SPUT ups the ante once more.

-SPUT issues more speculative units
-UK to declare nuclear energy “green”
-US Congress moving closer to sanctions on Russian uranium

By Greg Peel

Buyers flocked in to the uranium spot market last week, industry consultant TradeTech reports, pushing TradeTech’s weekly spot price indicator up US$1.25 to US$51.75/lb on almost 1mlbs of transactions.

Not only were traders and financial entities on the buy-side, but utilities got in on the act as well.

The buying was triggered by news the Sprott Physical Uranium Trust had updated its at-the-market equity program to issue up to an additional US$1.3bn of trust units. SPUT was responsible for half the buy-side volume last week.

The market also received a boost from reports the UK government may soon classify nuclear power projects as “green,” clearing the way for more institutional investors and environment-focused funds to back them.

And from developments in the US that may pave the way for potential sanctions on Russian imports.

The Sanction Question

Last week Canaccord Genuity hosted a webinar focused on the potential for the US government to advance sanctions on Russia in an effort to limit imports of Russian nuclear fuel material and improve US energy security.

This discussion was particularly timely, Canaccord notes, given recent actions by the US government, including the US Senate’s introduction of the Nuclear Fuel Security Act.

The discussion was led by Uranium Energy Corp’s Chairman Spencer Abraham, who is a former US senator and served as US Secretary of Energy from 2001 to 2005.

Programs like the Department of Energy’s ten-year Strategic Uranium Reserve are already opening the door to energy security through the establishment of a valuable domestic uranium inventory. This government support leads Canaccord to believe an expansion of this program is possible in 2023, with funding becoming available for all stages of the nuclear fuel cycle.

Last week three US Senators introduced the Nuclear Fuel Security Act. This bipartisan bill would implore the DoE to establish a nuclear fuel program, with the goal of on-shoring nuclear fuel production back to the US. This program would help to protect the US nuclear industry in the event of a disruption of Russian uranium supply.

This bill follows the House Energy & Commerce Committee's hearing earlier in the month that discussed the introduction of legislation focused on prohibiting the import of low-enriched uranium from Russia.

While this bill would continue to authorise some imports under the limitations set out in the Russian Suspension Act until 2028, all imports would be banned until 2040 once this waiver expires.

While both of these proposed bills will need to undergo further refinement and deliberation, Abraham was confident some iteration of these two propositions could be passed in the near future.

Term Market

Meanwhile, the term uranium market also remains active, TradeTech reports. Offers were due this week to several utilities seeking material formally through Requests for Proposals and “off-market” deals in the mid- and long-term delivery windows.

TradeTech’s term market indicators remain at US$52.00/lb (mid) and US$53.00/lb (long).

Uranium companies listed on the ASX:

AGE 20/02/2023 0.0400 2.56% $0.12 $0.03
BKY 20/02/2023 0.3700 2.86% $0.64 $0.21
BMN 20/02/2023 1.8200 – 4.49% $2.49 $0.15
BOE 20/02/2023 2.3700 -10.19% $3.10 $1.61 $3.200 35.0%
DYL 20/02/2023 0.6900 – 9.87% $1.25 $0.55
ERA 20/02/2023 0.2300 – 4.17% $0.42 $0.16
LOT 20/02/2023 0.2200 – 4.35% $0.46 $0.18
NXG 20/02/2023 6.7100 1.82% $8.99 $0.00
PDN 20/02/2023 0.7200 – 5.88% $0.97 $0.53 -173.2 $1.000 38.9%
PEN 20/02/2023 0.1500 3.45% $0.28 $0.12
SLX 20/02/2023 4.9900 0.00% $5.07 $1.04

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